# Aave proposes unified isolation treatment for V3.7 E-Modes

> A concrete cross-deployment collateral-policy change entered governance; no execution is established.

- URL: https://riadefi.com/on-chain/2026-09-21-aave-v3-7-emode-isolated-flag-unification/
- Type: Governance
- Stage: Proposed
- Evidence: confirmed
- Materiality: watch
- Event date: 2026-09-21
- Version: 1, published 2026-09-23 (first published 2026-09-23)
- Follow-up: 2026-10-05
- Advisor-relevant: no
- Affects: Aave v3 (protocol)

## What happened

An Aave DAO proposal seeks to enable the V3.7 isolated flag for 15 E-Modes and remove it from three others so that E-Mode-only debt cannot be backed by unrelated outside collateral.

## What changed

A concrete cross-deployment collateral-policy change entered governance; no execution is established.

## What did not change

The proposal states that the flag change itself would not alter liquidation thresholds, force repayment, or immediately change existing health factors. Current on-chain settings remain unchanged until execution.

## Confirmed

- The proposal identifies 15 E-Modes for isolation and three for removal of isolation.
- Enabling isolation would assign zero LTV to collateral outside the E-Mode collateral set.
- The proposal reports approximately $777 million of debt across assessed categories and approximately $445,000 of E-Mode-exclusive debt backed by outside collateral at the assessment dates.
- Ethereum Core, Ethereum Prime, Arbitrum, Base, MegaETH, Gnosis, Polygon, and Mantle deployments are included in the specification.

## Still open

- Voting outcome, payload review, and execution transactions.
- Live balances and affected accounts at execution time.
- Whether implementation dependencies alter the final category list.

## What it means for an advisor

- Identify any positions relying on collateral outside the specified E-Mode sets before execution.
- Monitor the final payload and effective on-chain configuration rather than assuming the Snapshot text became operative.
- Review borrowing-capacity assumptions for affected Aave positions if the proposal executes.

## Previous interpretation

The existing Aave v3 memo predates the proposed V3.7 E-Mode isolation normalization.

## Sources

1. [[ARFC] Unified Handling of the Isolated Flag in Aave V3.7 E-Modes](https://snapshot.org/#/aavedao.eth/proposal/0xcd8d33f6531ed3baa3f728ca8509c66ce7505877b349e6127981e8254adf9a22) · Aave DAO Snapshot · 2026-09-21


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.